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Thursday, 19 November 2015

States still broke; ...seeks more bailout

Governors of the 36 states of the federation rose from their meeting early yesterday with a clear resolution to ask the Federal Government for more assistance in the face of continuing economic hardship across the country.

Hours after their meeting, the governors got a fresh financial lifeline as the National Economic Council (NEC) at its 63rd meeting approved about $150 million out of the $400 million proceeds accruing from the Liquefied Natural Gas (LNG) to be shared among the three tiers of government.

Briefing State House correspondents at the end of the meeting, Governor Rauf Aregbesola of Osun State also disclosed that the status of the Excess Crude Account ((ECA), based on the briefing by the Accountant General of the Federation (AGoF) Idris Ahmed, still stood at $2.257 billion, indicating that there was no significant change from the last report.

The governors, who met in Abuja under the aegis of Nigerian Governors Forum (NGF) before the NEC meeting had expressed concern over the deteriorating state of the economy and resolved to meet with President Muhammadu Buhari to fashion a way out of the situation which has seen them struggling to meet up with expenditure especially payment of salaries.

This has largely been as a result of dwindling monthly allocations occasioned by plummeting crude oil price.

Reading the communique issued at the end of the meeting, Governor Abdulaziz Yari of Taraba State said the states could no longer pay the N18,000 minimum wage that was imposed on them when oil sold for $126 as against its present cost of $41.

He said the way out of the situation was the diversification of the economy with attention to agriculture and mining. According to him, “We resolved that we must look at ways to enhance revenue generation and at the same time look at ways to cut our overhead costs more especially the political office holders’ salaries and other overhead expenses.

“The situation is no longer the same when we were asked to pay N18,000 minimum wage, when oil price was $126 (per barrel) and continued paying N18,000 minimum wage when the oil is $41 and the source of government expenditure is from oil, and we have not seen prospects in the oil industry in the near future.

“We will diversify our economy in the area of agriculture and mining. But at the same time, we should understand our situation that where some states today are taking N100 million monthly allocation while they have salaries in particular of over N2 billion to pay is not sustainable. The Federal Government is invited to show more understanding that indeed, we need assistance.

“We therefore agreed here to take this suggestion to National Economic Council so we can to find ways to tackle this problem.

“We are looking at coming together to discuss with Mr. President and his team, with governors, technocrats and experts in the economy to see how we can tackle our troubled situation. We are working harder to deal with it.”

The governors also agreed to meet with stakeholders to articulate a robust strategy that would address the deplorable state of the nation’s economy.